Dismissal rights

Labour & European Law ReviewWeekly Issue 24020 October 2011

Employees need a year’s continuous service to bring a claim of unfair dismissal, unless the dismissal is automatically unfair (for instance, for asserting a statutory right). In M-Choice UK Ltd v Aalders, the Employment Appeal Tribunal (EAT) said that when an employee is dismissed with notice giving them a year’s service, but are then summarily dismissed before the year is up, the second dismissal trumps the first one.

Basic facts

On 26 July 2010, Ms Aalders (who started working for the company on 1 February 2010) received six months’ notice of termination of her employment on 1 February 2011.

She then lodged an unfair dismissal claim on 11 January 2011, saying that she was entitled to present her complaint before her dismissal took effect by virtue of section 111(3) of the Employment Rights Act 1996 (ERA).

However, the company then wrote to her on 21 January saying it no longer required her to be on garden leave and that her employment would terminate that day with immediate effect.

She then amended her Tribunal claim to add a second complaint of unfair summary dismissal on 21 January 2011 for asserting the statutory right not to be unfairly dismissed.

Relevant law

Section 108(1) states that claimants must have been “continuously employed for a period of not less than one year ending with the effective date of termination” to claim unfair dismissal.

Section 111(3) states that: “Where a dismissal is with notice, an Employment Tribunal shall consider a complaint under this section if it is presented after the notice is given but before the effective date of termination".

Section 111(4) states that: “references to the effective date of termination included references to the date which would be the effective date of termination on the expiry of the notice …”

Tribunal hearing

The Tribunal judge had to decide whether Ms Aalders had enough continuous service to bring the claim of unfair dismissal.

Referring to section 111(4) ERA, he said she did because the effective date of termination was 1 February 2011, giving her the year’s requisite continuous employment.

EAT decision

The EAT said that the first issue to resolve was whether Ms Aalders had brought two separate claims of unfair dismissal or one. As she only had one contract of employment which could only be terminated once, it decided she had brought one claim which was advanced in two different ways. The next issue to decide was the date on which it had come to an end.

Relying on the decision in Stapp v The Shaftesbury Society, which had provided a “clear and unambiguous” statement of the law, it said that her employment had terminated on 21 January.

Stapp made clear that when an employee is dismissed while working out their notice, the date of the termination of employment is brought forward to the date on which they were summarily dismissed. That meant her dismissal on notice which expired on 1 February 2011 was displaced by her summary dismissal on 21 January 2011.

However, it pointed out that the issue for the Tribunal when it comes to decide on the merits of her claim, will be to decide the principal reason for her summary dismissal. If it finds that it was because she had asserted a statutory right (to present a complaint of unfair dismissal), then she would not need a year’s continuous employment anyway as that would make the dismissal automatically unfair.